US Dollar Index Decline Boosts Copper Prices, BC Most-Traded Copper Contract Strengthens [SMM BC Copper Commentary]

SMM, January 7: Today, the most-traded BC copper 2502 futures contract opened at 66,390 yuan/mt, closing with a bearish candlestick. The lower shadow pierced through the Bollinger mid-band and crossed the 20-day and 40-day moving averages. Overnight, the most-traded BC copper contract opened higher with a gap, hitting a peak at the opening before the tug-of-war between longs and shorts pushed the futures market to test the 66,000 yuan/mt level. During the morning trading session, the center of the futures market shifted downward as bulls reduced positions, briefly bottoming at 65,710 yuan/mt. In the afternoon trading session, as bears reduced positions, the BC copper 2502 contract rebounded and closed at 66,070 yuan/mt, up 870 yuan/mt or 1.33%. The increase was mainly attributed to the reduction in short positions. Open interest stood at 5,554 lots, down 837 lots from the previous trading day, while trading volume reached 9,769 lots, an increase of 1,378 lots from the previous day.

Macro side, reports suggested that after taking office, Trump would impose tariffs only on critical industries, easing market expectations of a broad-based tariff hike. The US dollar index pulled back, boosting copper prices.

The SHFE copper 2502 contract closed at 74,470 yuan/mt. Based on the BC copper 2502 contract price of 66,070 yuan/mt, its post-tax price is approximately 74,659 yuan/mt. The price spread between the SHFE copper 2502 contract and the BC copper 2502 contract was -189 yuan/mt, with the spread remaining inverted and widening compared to the previous trading day.